Verizon's bid challenges AT&T's offer for Straight Path

The new bid comes in at a total of $1.8 billion, offering $104.64 per share in an all-stock deal, compared to AT&T's offer of $95.63 per share.

"The race is on", said Max Silber, vice president of mobility for MetTel, a New York City-based solution provider, and AT&T partner.

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Straight Path shot up $14.68 (13.24%) to $125.57 each in late morning trading Tuesday.

"Straight Path is not permitted to enter into the Bidder's merger agreement or to change its recommendation in favor of the AT&T transaction unless, at the end of the Negotiation Period, the Straight Path Board determines that the Bidder's offer continues to constitute a "Superior Proposal" and satisfies certain other requirements under the AT&T Merger Agreement", Straight Path said in its release.

According to Straight Path, the ball is now in AT&T's court. And if Straight Path opts to go with its new suitor, it will be required to pay a $38 million termination fee to AT&T per the terms of the original agreement.

Millimeter wave spectrum - between 30 GHz and 300 GHz - is expected to play a large role in 5G networks. The second-largest US wireless carrier was willing to offer a big time buyout in order to acquire Straight Path's massive amount of spectrum as the wireless giant works towards bolstering its 5G portfolio. "We will evaluate the situation and make a decision in that time frame".

The settlement stemmed from an FCC Enforcement Bureau investigation that began with an anonymous source publishing allegations that Straight Path falsified build out claims in obtaining renewal of its 39 GHz spectrum licenses.